Next week begins a barrage of earnings releases from the recently completed third quarter. Some of the bigger names to report include Ebay, IBM, Google, Xilinx, Intel, Yahoo, GE and Bank of America.
WATCH THE GUIDANCE
This group and others will give us a good view of what we might expect, more importantly I’ll be looking to the guidance. It’ll be critical to pay attention to what companies may be saying about the economy, the outlook and business prospects/growth.
Technically, many stocks are in great shape, others seem to be priced for perfection. That is always a concern around earnings time, where a sell the news effect is strong. That’s not always a major concern if the chart is saying ‘go.’
STRATEGIES TO MINIMIZE RISK
Many prefer to stay away from trading in front of earnings. For me, I will take the risk and plunge is the situation is right. My batting average is pretty good at finding some of the better ideas but I am far from perfect. Many believe this is just a binary result with options – win or lose it all – but that is not the case. Truthfully, there are some great hedging strategies like butterflies, condors and combos that can minimize risk while offering some potentially great returns.
EYE ON GOOGLE
For next week, I’ll be looking hard at Google, where a straight call or vertical spread is my likely choice. Earnings out after the close on October 17. Other names are on my radar, especially GE, but I have some time to wait and see how this week starts.
